Carlyle’s Rubenstein Sees Exits Beyond IPOs for Private Equity

By Jason Kelly and Margaret Brennan

Feb. 18 (Bloomberg) -- Carlyle Group LP co-founder David Rubenstein said the dwindling market for initial public offerings isn’t hindering buyout firms from profiting by selling their company holdings to corporations or other financial firms.

“There are many ways to get money back to investors and the fact that IPOs can’t get done isn’t a big deal,” Rubenstein said today in an interview on Bloomberg Television.

About half this year’s scheduled IPOs have been postponed or shelved amid stock-market volatility. Buyout managers including Blackstone Group LP, KKR & Co. and Washington-based Carlyle have sought to take some of their holdings public to pay down debt and distribute profits to the pensions, endowments and wealthy individuals who invest in private-equity funds.

After Blackstone delayed the IPO of Travelport Ltd. last week and cut the size of its Graham Packaging Co. offering, private-equity may increasingly favor selling to so-called strategic buyers to reap gains for their limited partners. More than a third of funds raised in 2006 have yet to return any money to investors, according to data from London-based researcher Preqin Ltd.

“They haven’t had a lot of distributions lately, but they will in 2010,” Rubenstein said.

Carlyle is the world’s second-biggest private-equity company behind Blackstone, of New York. Rubenstein said that in addition to being able to exit investments, he’s also seeing more ability to raise money and execute transactions.

“Finally, we’re able to get deals done,” he said. “We’ll see more deals in 2010 than 2009 for sure.”

Announced private-equity transactions worldwide dropped 71 percent to $84.6 billion last year from 2008, according to data compiled by Bloomberg.

To contact the reporters on this story: Jason Kelly in New York at jkelly14@bloomberg.net; Margaret Brennan in New York at mbrennan25@bloomberg.net